Woodward v. Pressley

MARTIN (Harry C.), Judge. We hold the trial court erred in dismissing plaintiffs’ action. Plaintiffs’ evidence must be considered in the light most favorable to them. Scott v. Darden, 259 N.C. 167, 130 S.E. 2d 42 (1963). In passing on this assignment of error, evidence erroneously excluded is to be considered with other evidence offered by plaintiffs. Norburn v. Mackie, 262 N.C. 16, 136 S.E. 2d 279 (1964). Plaintiffs must produce evidence tending to show all the essential elements of fraud. While fraud has no all-embracing definition and is better left undefined lest crafty men find a way of committing fraud which avoids the definition, the following essential elements of actionable fraud are well established: (1) False representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party. Ragsdale v. Kennedy, 286 N.C. 130, 209 S.E. 2d 494 (1974); Whitehurst v. Insurance Co., 149 N.C. 273, 62 S.E. 1067 (1908). [63] In their negotiation for the sale of the subject property, defendants submitted the profit and loss statement (plaintiffs’ Exhibit 3) to plaintiffs. The representations therein were matters within the peculiar knowledge of defendants. Plaintiffs’ evidence tends to show defendants had knowledge of the contents of the Schedule C form (plaintiffs’ Exhibit 7) at and before they submitted the profit and loss statement (plaintiffs’ Exhibit 3) to plaintiffs on 24 June 1974. The record does not disclose the date plaintiffs’ Exhibit 7 was executed by defendants. Defendants were required to file their 1973 income tax return on or before 15 April 1974. Nothing in the record to the contrary, we may assume it was executed by defendants on or before 15 April 1974. Plaintiffs received the profit and loss statement (plaintiffs’ Exhibit 3) by letter dated 24 June 1974. The contract of sale was executed 7 July 1974. The evidence is sufficient to raise a jury issue as to the falsity of the profit and loss statement (plaintiffs’ Exhibit 3). This is true even considering the evidence of the amended Schedule C produced by defendants on cross-examination of Pressley. The difference in net profit as shown on Exhibit 3 and the amended. Schedule C is $44,890.37. This is a substantial difference. There is no evidence in the record as to the date the amended Schedule C was filed with the Internal Revenue Service. The defendant Hubert Pressley testified “the amended return was before they ever brought suit against me. I guess I found the amended return in 1975. I don’t remember exactly when the amended tax returns were filed.” Defendants knew plaintiffs were dissatisfied with the transaction at the close of the 1974 season. Plaintiffs instituted suit 7 October 1975. We note, with interest, that entries on defendants’ amended Schedule C form (filed, as an exhibit on appeal) as to the income from the cafeteria and the motel are identical to the penny with those entries on the profit and loss statement (plaintiffs’ Exhibit 3) submitted to plaintiffs 24 June 1974. Plaintiffs relied upon the profit and loss statement (plaintiffs’ Exhibit 3) to their damage. Plaintiffs’ evidence, considered under the above stated principles, makes a case for the twelve. Since there must be a new trial, we refrain from discussing plaintiffs’ assignment of error as to the exclusion of their Exhibit 7. The same may not occur at the next trial. The judgment of involuntary dismissal was improvidently entered and is [64] Reversed. Judges Morris and Arnold concur.